Magnitude of poor countries’ billion-dollar green investment need emerges through climate pledges submitted to the UN
Climate finance can fund African solar projects to cut carbon (Pic: Lance Cheung/Flickr)
By Alex Pashley
It was always going to cost. Now, with their submissions to the UN, developing nations are putting a price tag on climate action.
For the seven mainly-African countries that have hinged their plans on climate cash so far, it nears US$300 billion over 15 years.
Dozens more are expected to add claims before an October deadline for contributions to a UN-backed global warming agreement in December.
Climate finance, which flows from rich governments and private capital, helps countries adapt to the onset of extreme weather and funds carbon-cutting projects.
The rich world has vowed to mobilise US$100 billion a year from 2020 for the poor. Now potential recipients are setting out how much they need and where they plan to spend it.
Show me the money
Benin: $30bn total, $2bn from government
Democratic Republic of Congo: $21.6bn
Djibouti: $5.4bn for deeper emissions cuts (60% instead of 40%)
Ethiopia: $150bn for ‘Green Economy Strategy’
Kenya: $40bn
Macedonia: €4.5bn ($5.0bn) for higher target (36% emissions cut from 30%)
Morocco: $45bn, $35bn on international support such as Green Climate Fund
Total – $296.5bn
Reeling from a seven-year drought that has displaced thousands, tiny Djibouti cannot withstand the wrath of a warming planet alone.
The East African state is one of the latest countries to outline its plan to rein in its tiny 0.005% share of global greenhouse gas emissions ahead of the Paris summit.
To meet it, the government will invest $3.8bn over the next 15 years “in collaboration with the international community”.
It’s destined for wind farms and cables to import cheaper electricity from neighbouring Ethiopia.
With an extra $1.6bn through the likes of the UN-backed Green Climate Fund, it offers to deepen emissions cuts from 40% to 60% on business-as-usual by 2030.
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Djibouti joins a raft of states from Morocco to Macedonia outlining different sums in their “intended nationally determined contributions” (INDCs) to a Paris deal.
They appear to be following the advice of UN climate chief Christiana Figueres, who told a business audience in April INDCs could be seen as “investment prospectuses”.
With the biggest pitch so far, Ethiopia is seeking $150bn to cut its emissions by nearly two-thirds by 2030 on track to middle-income status.
“In order to realize the full potential of its mutually reinforcing INDC objectives of reducing emission and building resilience, Ethiopia seeks to utilize existing and emerging climate finance mechanisms,” its communication reads.
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Almost 200 countries are required to post national plans by October.
More than half are potentially eligible for climate finance, but not all will use this platform to set out their investment needs.
China, for example, submitted an array of domestic goals without reference to the cost.
The 48 ‘least developed countries’, which make up 12% of world population but just 2% of GDP, are likely to pitch for money.
And India – the world’s fourth biggest emitter after China, the US and EU – is widely expected to submit a “twin-track” plan. Some action, like its much-touted solar power push, will be unconditional while further measures could depend on international support.
“It’s not surprising that the whole cost of implementation in these countries is attracting attention,” said Smita Nakhooda, a climate finance expert at the Overseas Development Institute in London.
“It’s going to take substantial investment.”
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To move past the ineffectual Kyoto Protocol, which mandated only rich countries to make emissions cuts, the UN has changed tack.
For Paris, every nation is expected to submit a plan, but can assess its own circumstances.
The little guidance on what a country should include has led to a mix of formats, according to Mattias Soderberg at advocacy group Act Alliance.
Benin is clear. It needs $30bn and can only afford to spend $2bn of its own money. Meanwhile, Kenya requires $40bn though is vague on the scale of support it wants from the international community.
“Developing countries said very clearly we can’t make mitigation pledges if we’re not linking to finance, because the ambition level for us depends on support received. But developed countries said pledges with finance are a separate discussion,” Soderberg says.
Many of the world’s poorest states are reluctant to name a figure, he adds, for fear they won’t be able to up it if circumstances change.
Limited capacity to map out impacts also affects the accuracy of totals, sowing scepticism on donors’ part.
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On the donor side, it remains unclear how all the cash will be raised.
The Green Climate Fund has rustled up US$10 billion, which it is set to start distributing by the end of the year.
It is nowhere near the $100bn goal for 2020 and experts say the private sector will be critical to meet surging demand.
Failure to find that money risks “poisoning or hijacking the agenda” of the Paris summit, Teresa Ribera at French think tank IDDRI told RTCC in July.
The EU is trying to draw up a credible package of support, but austerity in Europe has crimped foreign aid budgets.
In the US, a Republican-controlled Congress is vying to torpedo the Obama administration’s $4bn grant to the Green Climate Fund.
And $100bn is a gross underestimate of need, according to ODI’s Nakhooda. Trillions of dollars of investment are eventually required, from public and private sources.
The policies costed in INDCs are just the beginning.